[Asia Economy Reporter Hwang Yoon-joo] Hanwha Solutions has successfully issued its first-ever "Green Bond" after obtaining ESG (Environmental, Social, and Governance) certification. Green bonds are special-purpose bonds issued to raise funds for eco-friendly projects such as climate change response and require meeting certain qualifications to be issued.
Hanwha Solutions plans to further expand its investments in eco-friendly energy sectors aimed at energy transition and carbon neutrality, alongside approximately KRW 1.35 trillion raised through a paid-in capital increase secured last month.
Hanwha Solutions Secures Global ESG Certification
Hanwha Solutions announced on the 15th that it will issue a green bond worth 1 billion yuan (approximately KRW 171.4 billion) with a 3% coupon rate and a 3-year maturity on the 19th. The green bond, issued in yuan, corresponds to an interest rate of about 0.70% when swapped into Korean won, considering the current exchange rate and interest rate fluctuations. The interest rate differential between the two countries varies in real-time depending on exchange rates and expected interest rates.
This green bond, which is also Hanwha Solutions’ first overseas public bond, was fully allocated to institutional investors in Europe and Asia. The bond will be issued with an international credit rating of ‘AA’ from S&P, one of the world’s top three credit rating agencies, backed by a payment guarantee from the Credit Guarantee Investment Facility (CGIF), a trust fund of the Asian Development Bank (ADB). To support the issuance of this green bond, the Export-Import Bank of Korea has agreed to provide guarantees covering 50% each through a separate contract with CGIF. Hanwha Solutions receives various financial supports from the Export-Import Bank of Korea to promote eco-friendly energy projects.
To issue this green bond, Hanwha Solutions obtained a Second Party Opinion (SPO) certification last month from Sustainalytics, a sustainability management evaluation agency, confirming that it meets a certain level of ‘ESG management’ standards.
Hanwha Solutions’ Q CELLS division was highly rated for securing world-class solar cell and module quality, having ranked first in the solar power category for two consecutive years at the German Household Consumer Goods Awards and being selected as a ‘Top Performer’ for five consecutive years in the ‘2020 Solar Module Reliability Test’ conducted by global solar verification agencies DNV GL and PVEL. Additionally, the company’s efforts to reduce carbon emissions were reflected in the evaluation, including expanding market share in solar power?ranking first in the U.S. residential and commercial module market?and entering the green hydrogen energy business in the chemical sector. Furthermore, the development of sustainable future products such as the eco-friendly plasticizer Eco-DEHCH was also recognized.
Expanding Renewable Energy Investments Alongside Paid-in Capital Increase Funds
Hanwha Solutions plans to expand its renewable energy businesses such as solar power and hydrogen energy by leveraging the funds raised through this green bond issuance along with the previously secured paid-in capital increase funds.
In the solar power sector, the company will increase research and development (R&D) investments in next-generation solar materials such as perovskite and continue investing in power generation projects that develop, construct, and sell solar power plants in profitable markets like the U.S. and Europe. It will also invest in virtual power plant (VPP) projects based on distributed power generation, which analyze users’ electricity consumption patterns using artificial intelligence (AI) technology to integrate and sell surplus electricity.
In the hydrogen sector, Hanwha Solutions is investing in the development of water electrolysis technology to produce hydrogen, expanding hydrogen tank businesses for storage and distribution, and mergers and acquisitions (M&A) of companies holding core technologies.
Shin Yong-in, Chief Financial Officer (CFO) of Hanwha Solutions, stated, "Building on the successful issuance of this green bond, we will continuously pursue ‘green financing’ and expand eco-friendly energy businesses in the U.S. and Europe."
Meanwhile, recently, Korea Ratings and NICE Credit Rating upgraded Hanwha Solutions’ long-term credit rating outlook from ‘negative’ to ‘stable’ at ‘AA-’. The improvement in solar power and chemical business performance and the enhancement of financial structure through the paid-in capital increase were cited as key factors.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
